The Victorian Government is cutting funding to the state’s social service groups and frontline charities, in a move that will lead to job losses and service cuts.
“This is an absolute body blow to those organisations which supported Victorians through the worst of COVID,” VCOSS CEO Emma King Said.
Government funding for social service agencies is indexed, meaning it’s supposed to go up each year in line with the cost of delivering services. This year costs are going up more than 4%, but the government will only increase funding for 2021/22 by a paltry 2%.
“In real terms, that’s a cut,” Ms King said.
Ms King said costs have increased dramatically over the past year because of three main factors outside the control of service organisations.
These include: a recent increase to the minimum wage (up 2.5%), new superannuation contribution requirements (increasing charities’ wages bills by 0.5%), and new Portable Long Service Leave obligations.
“Funding needs to increase by at least 4%, just to cover the rising costs of delivering services,” Ms King said.
Historically, Victoria’s social services sector employs mostly females. So it will be Victorian women most at risk of losing their jobs as a result of the funding cuts.
Funding needs to increase by at least 4%, just to cover the rising costs of delivering services
Ms King said the cuts follow recent praise heaped on the social sector during COVID.
“Politicians are very good at thanking us for our service.”
“But thanks isn’t enough. Thanks doesn’t pay the bills.”
“Thanks rings hollow when funding is being cut,” she said.
Ms King did commend the government for establishing a new Working Group to review the process of funding indexation going forward, but warned this will achieve little in the short term.
“A new Working Group won’t avert a funding crisis this year,” she said.
The funding cuts take immediate effect. To avoid an imminent crisis, VCOSS is urging the Victorian Government to index funding by a fair and adequate amount, or introduce new short-term funding measures to plug the gap.